All power plants must emit a certain amount of heat during electricity generation. This can be released into the natural environment through cooling towers, flue gas, or by other means. By contrast CHP captures some or all of the by-product heat for heating purposes, either very close to the plant, or—especially in Scandinavia and eastern Europe—as hot water for district heating with temperatures ranging from approximately 80 to 130e °C. This is also called Combined Heat and Power District Heating or CHPDH. Small CHP plants are an example of decentralized energy.[1]
Thermal power plants (including those that use fissile elements or burn coal, petroleum, or natural gas), and heat engines in general, do not convert all of their thermal energy into electricity. In most heat engines, a bit more than half is lost as excess heat (see: Second law of thermodynamics and Carnot's theorem). By capturing the excess heat, CHP uses heat that would be wasted in a conventional power plant, potentially reaching an efficiency of up to 89%, compared with 55%[6] for the best conventional plants. This means that less fuel needs to be consumed to produce the same amount of useful energy.
The viability of CHP (sometimes termed utilisation factor), especially in smaller CHP installations, depends upon a good baseload of operation, both in terms of an on-site (or near site) electrical demand and heat demand. In practice, an exact match between the heat and electricity needs rarely exists. A CHP plant can either meet the need for heat (heat driven operation) or be run as a power plant with some use of its waste heat. The latter being least advantageous in terms of its utilisation factor and thus overall efficiency. The viability can be greatly increased where opportunities for Trigeneration exist. In such cases the heat from the CHP plant is also used as a primary energy source to deliver cooling by means of an absorption chiller.
Mini cogeneration is a so called distributed energy resource (DER). The installation is usually more than 5 kWe and less than 500 kWe in a building or medium sized business. In this size range the viability or utilisation factor of the CHP plant is very important to consider since it will greatly affect the efficiency and cost effectiveness (payback) of the CHP plant. The utilisation factor is essentially the calculated hours of operation of the CHP plant expressed as a percentage of the total number of hours in a year. If less than 40% then the application of CHP is considered to be unviable. To be viable a good baseload for electrical demand and heat demand must exist. Such baseloads arise where building occupation or process activities are extended or continuous in operation. This typically includes for hospitals, prisons, manufacturing processes, swimming pools, airports, hotels, apartment blocks, etc.
